The forex market is a very specific one, as everyone knows, and as such, it boasts a number of idiosyncrasies that often make this particular market seem intimidating to outsiders. Moreover, even for some Forex traders, it can get a bit too chaotic, especially if they do not have a theoretical background that will help them come up with a winning strategy.
This is where legendary traders come in, providing advice both directly and indirectly, with their trading practices and strategies offering great tips and concepts on which FX traders can build in order to maximize their profits. Today, we will be looking at some of the most legendary non-Forex traders in the history and see what lessons FX traders can learn from them.
Warren Buffet is arguably the most famous name in the trading world (if we do not include fictional characters like Gordon Gekko from Wall Street), a man who has made billions and whose unassuming way of life is inspiration to many. The lesson that Forex traders can take from his story is to only invest in what they know. If you are not really familiar with the Japanese economy, for instance, you will want to steer clear of trades which involve their currency. If you do not understand how the prices of crude oil are formed, stay away from currencies which are heavily dependent on them, like CAD.
Anyone who knows anything about the stock market has heard about the Fidelity Magellan Fund, one of the strongest funds in history of the market. The man who managed this fund for decades is Peter Lynch, a man who also ensured annual returns of nearly 30% for his investments. Much like Warren Buffet, Lynch has always emphasized the importance of knowing what you are investing in. In addition to this, he has always talked about the importance of investing in companies who are managed well. In the Forex market, the equivalent would be currencies of countries that are stable and that are run by people who know what they are doing (for example, not Russia).
Tim Sykes may not have been trading for many decades like most other people on our list, but for Forex traders, the lessons that can be learned from him may be even more valuable. The most successful penny stocks trader of all time has always pointed out the fact that one needs to be brave when trading, trying their luck in markets that are usually considered less-traditional, like the Forex market for instance. He has also emphasized the importance of hard work and dedication when you choose to trade in such a market.
Barton Biggs was a money manager who, among other things, predicted the dot-com bubble of the late 90s and who is to this day considered to be one of the best global investment strategists ever. One of the most important lessons that Forex traders can learn from Briggs is that there are no equations and relationships that will always work. He always talked about the fact that what happened in a similar situation before does not necessarily mean it will happen again.
Michael Steinhardt is one of the most revered traders in the history of the stock market, even though he is not what you would call a household name. Still, everyone on the Street knows the man and they follow what he is doing at all times. For a Forex trader, the most important thing to learn from Steinhardt is that mistakes happen and that it is best to make them often and early. In addition to this, he has always taught that intuition should be a part of a trader’s strategy since it is impossible to have all the facts needed for a trade.
James D. Burbank has traveled the world during his years in the trade show industry. He is currently on hiatus, working on his blog, BizzMarkBlog and investing in various markets.
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